KUALA LUMPUR (Feb 4): Malaysia’s fiscal calculations strictly follow international standards and are recognised by credit rating agencies and global institutions, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
The government uses cash-based accounting system which is widely used by developed nations, including Singapore, Germany, and the Netherlands, he told the Dewan Rakyat on Wednesday while wrapping up the royal address debate.
The auditor general has also confirmed the federal government’s financial statements present a true and fair view, he said. “Therefore, the calculation of the fiscal deficit should not be questioned,” he said.
Under the system, tax revenue reported in the annual budget reflects actual collections without deducting excess amounts to be refunded.
The remarks came after former economy minister Datuk Seri Mohd Rafizi Ramli said the government may have “overstated” revenue, as figures include outstanding tax refunds yet to be returned to taxpayers.
If the outstanding refunds were accounted for, the 2024 fiscal deficit would be an estimated 5.8% to 6.0% of gross domestic product, compared with the official figure of 4.1%, based on an economy valued between RM1.65 trillion in real terms and RM1.93 trillion in nominal terms, Rafizi said.
Amir Hamzah reiterated that the government remains committed to fiscal reforms, which have been reinforced under the Public Finance and Fiscal Responsibility Act 2023. He noted that the government has a target to shrink the budget gap to 3% of gross domestic product by 2028.
Corporate tax refunds to be completed by February 2026
Amir Hamzah also highlighted the government’s efforts to settle outstanding tax refunds, with 2023 corporate tax refunds expected to be completed by February 2026 and 2024 assessment repayments fully settled by year end.
In 2025, the Inland Revenue Board refunded a total of RM22.45 billion in excess taxes to 3.6 million taxpayers, he noted. Of this, RM7.5 billion was disbursed in December alone, exceeding the initial commitment of RM4 billion announced by Prime Minister Datuk Seri Anwar Ibrahim.
All taxpayers, including corporate entities, are eligible for compensation for delayed refunds under the Income Tax Act 1967, Amir Hamzah said, adding that RM23.6 million in compensation was paid in 2025.
He also said outstanding goods and services tax refund claims, which reached RM19 billion when the tax was abolished in 2018, had largely been resolved with only about RM30 million remaining due to legal disputes or incomplete company bank account details.
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